Fur flies over Shoreline shortfall Fur flies over Shoreline shortfall (November 11, 2005)

City, Clear Channel blast each other in separate legal filings ahead of trial

By Jon Wiener

The gloves, if they ever existed, are off.

Fresh off another legal victory over Clear Channel, attorneys for the city of Mountain View went on the offensive last week, calling their opponents' legal strategy "a ruse" and asking the judge to dismiss all of the remaining legal claims the company has made against the city.

The city did not mince words in a motion for summary judgment filed with Judge William Elfving last Monday, accusing the company of trying to bully its way out of millions.

The city's motion begins, "As the procedural history before this Court demonstrates, Plaintiffs' entire complaint is a ruse, concocted for the sole purpose of interfering with efforts by Defendant, City of Mountain View, to fulfill its role of public accountability."

The company did not wait long to fire back, filing its own motion against the city the very next day. In it, Clear Channel seeks to toss out the charges of racketeering and theft of public funds, but leaves others unchallenged.

Mountain View and Clear Channel are marching toward a Feb. 6 trial date over allegations that the company has cheated the public out of several million dollars during its tenure at the 23,000-seat Shoreline Amphitheatre, and each side appears to be losing whatever patience it had with the other.

Clear Channel's lawsuit, originally filed in 2001 to block the city from completing its yearly reviews of the amphitheater's finances, revolved around the issue of parking lots. In 2000, the same year Clear Channel purchased amphitheater operator SFX, Inc., the city switched the lots it allowed the venue to use for concert parking. Clear Channel complained that the switch caused traffic jams and safety problems, and said it was forced to file suit because the city refused to deal with the issue informally.

The city sued back, saying the company was hiding revenue in an effort to avoid paying rent. The city's main claim at the time was that a parking fee newly assessed to every single concert ticket was really a ticket price increase -- or, lawyers put it in last week's filing, "a gimmick to disguise ticket revenue in order to avoid paying percentage rent and cheat performers out of their cut of the proceeds."

Parking-on-the-ticket, as it's known, was just one of the areas in which city staff accused the company of cooking its books -- an accusation supported by a city-sponsored audit released this August. The report detailed more than $20 million in underreported revenues dating back to 1999, the year before Clear Channel purchased SFX, Inc.

In Clear Channel's filing, the company dismisses the audit as part of an "unbridled fishing expedition" and again complained that the city never sent it a copy of the audit report, instead releasing the report to the news media and the public. The motion says that even if the report were true, it does not prove the company intentionally falsified records.

Judge Elfving will hear the motions on Dec. 15. A month ago, he ruled that the city could evict the company if it didn't comply with several demands, including payment of more than $3.6 million in back rent and overdue penalties.
Naming rights an issue

The city's motion accuses Clear Channel of threatening to divert shows and revenue away from Shoreline if it was not allowed to sell the naming rights to the amphitheater.

A similar threat is at the crux of a lawsuit the owners of San Francisco's Warfield Theater have brought against Bill Graham Presents, the same Clear Channel subsidiary that runs Shoreline.

The plaintiff, Warfield Theater LLC, says that when BGP learned that the previous owner was planning to let the company's lease expire in 2008 and bring in another operator, they set out to devalue the Warfield's name by illegally selling naming rights to the SF Weekly.

Court documents in that case quoted one BGP representative threatening his new landlord by saying, "If we don't get the follow-up lease, we'll f--- that place up."

In the case of both the Warfield and Shoreline, the company founded by the late rock legend Bill Graham is facing eviction from two of its most storied venues.

In Mountain View, the city council rejected proposals for "Yahoo Pavilion" and "Lycos Amphitheatre." These days, music fans are attending "Sleep Train Concert Season at Shoreline Amphitheatre," which some will remember was once "presented by the Chronicle."

Clear Channel's sponsorship agreement with Sleep Train is just one of many documents that city auditors say the company is withholding in violation of its lease agreement. The city says that it is entitled, under the lease, to a small cut of sponsorship deals, even those that apply to more than one of the company's 40-plus amphitheatres.

E-mail Jon Wiener at jwiener@mv-voice.com

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